Los Angeles Times columnist George Skelton correctly argues this morning that the state budget can't be saved by cutting pensions. After all, pension payments from the general fund are expected to be $3.7 billion, and the state is facing a two-year budget shortfall estimated at $25 billion.
However, if California had less generous pension payments, it could save money. And every little bit matters. Imagine if just $1 billion could be saved via pensions. That would be enough to restore the cuts that Gov. Brown and the legislature made to the University of California and the California State University.
Of course, cutting pensions isn't as easy as that. Pension obligations for current retirees are untouchable. And it's a difficult matter to cut pension payouts for current employees. But just as pensions shouldn't be an excuse for not making tough decisions on the budget (which is Skelton's argument) the fact that we can't solve the whole budget crisis shouldn't be a reason not to make our pensions more sustainable -- and less costly -- for current employees.
The money we don't spend on retirees could be put to good use on, to borrow a phrase, winning the future.
